Stay or Pay Laws

Colorado's stay-or-pay law

C.R.S. § 8-2-113(3)(a), from HB 22-1317, amended by HB 24-1324. It applies to agreements entered into or renewed on or after August 10, 2022.

Updated

Law in force Limits since August 10, 2022.

Colorado doesn't ban training repayment outright. Since August 10, 2022, a repayment term only survives if it meets each of the limits below; one that doesn't is treated as a void noncompete. A 2024 law (HB 24-1324) let the Attorney General add rules on how transferable the training must be, and treats a training debt as consumer credit.

The Attorney General has used the law. PetSmart had charged groomers up to about $5,500 if they left within two years; in November 2025 it agreed to end those agreements and pay $225,000.

What it means for each kind of repayment

For agreements entered into or renewed on or after August 10, 2022:

Training costs

Only with conditions

  • The training is separate from normal on-the-job training.
  • You only repay its reasonable cost.
  • What you owe goes down month by month over the two years after the training.
  • You were given the repayment terms in a separate signed notice before you accepted the job (or 14 days ahead, if you already worked there).

A sign-on bonus

Not settled

  • Colorado's training rule doesn't mention bonuses. Its noncompete law is broad, but no court has said whether it reaches a sign-on bonus clawback.

Relocation money

Not settled

  • Colorado's training rule doesn't mention relocation, and no court has said whether its noncompete law reaches a relocation clawback.

Tuition or a course you chose

Only with conditions

  • The training is separate from normal on-the-job training.
  • You only repay its reasonable cost.
  • What you owe goes down month by month over the two years after the training.
  • You were given the repayment terms in a separate signed notice before you accepted the job (or 14 days ahead, if you already worked there).

A fee or penalty for leaving

Not settled

  • A fee for leaving that is not a training cost falls outside the training rule. Whether it is a void restraint under the noncompete law has not been decided.

What the law leaves out

  • Repaying a scholarship for an apprenticeship if you did not meet its conditions.
  • Public employers may spread the reduction over more than two years.

If your contract breaks it

  • A term that breaks the law is void. An employer that presents or tries to enforce one owes your actual losses plus a $5,000 penalty for each worker, and your lawyer fees.
  • You can ask a court or arbitrator to declare the term void.
  • The Attorney General can sue, and can recover three times what an employer collected or tried to collect.

Where to complain: Colorado Attorney General.

Check your Colorado contract

Start with the date on your contract.

Only with conditions

In Colorado, a clause asking you to repay training costs for leaving only holds if it meets every condition below (if you signed on or after August 10, 2022; before that day, the older rules apply).

  • The training is separate from normal on-the-job training.
  • You only repay its reasonable cost.
  • What you owe goes down month by month over the two years after the training.
  • You were given the repayment terms in a separate signed notice before you accepted the job (or 14 days ahead, if you already worked there).

Everything on Colorado

This is general information, not legal advice. For your own contract, a lawyer or your state's labor department can tell you where you stand.

Sources

  1. HB 22-1317, Restrictive Employment Agreements, Colorado General Assembly, read November 8, 2026.
  2. HB 24-1324, Attorney General Restrictive Employment Agreements, Colorado General Assembly, read November 8, 2026.
  3. Attorney General Phil Weiser, PetSmart reach settlement, Colorado Attorney General, November 13, 2025.